Washington, D.C. — Today, the U.S. Supreme Court heard oral arguments in Moore v. United States— a challenge to the constitutionality of the Mandatory Repatriation Tax (MRT), a one-time transition tax included in the 2017 tax cuts designed to prevent accumulated earnings from going untaxed permanently. The plaintiffs are pushing an aggressive and unprecedented view of the 16th Amendment to the U.S. Constitution (which authorizes Congress to tax income) to argue that the definition of “income” doesn’t include unrealized gains. They further argue that the MRT is a tax on unrealized gains because it taxes income that has been realized by a corporate entity, but has not been distributed to its shareholders. 

What’s more, if the Court recognizes the plaintiffs’ argument, it would create years of tax uncertainty for small businesses, harming their ability to compete and resulting in a range of negative outcomes, from forgoing critical investments to outright failure.

On October 23, Main Street Alliance (MSA), Small Business Majority , and Anne Zimmerman (business owner, and co-chair of Small Business For America’s Future) submitted a brief to the Supreme Court in Moore v. United States urging the Court to reject radical arguments that threaten to upend our entire tax system. The coalition is represented by Democracy Forward. 

“Small businesses employ almost 62 million people in the U.S. To help this community compete and grow, it will be important to protect them from drastic, unnecessary changes to federal tax provisions as frequent tax code changes create instability and confusion for smaller firms,” said John Arensmeyer, founder & CEO of Small Business Majority. “We are proud to join small business advocates on the ‘Moore v. U.S.’ amicus brief urging the U.S. Supreme Court to maintain predictability in the federal tax structure for small business owners.”

“Small businesses are the backbone of the United States and heavily rely on our current tax code to support the 61.7 million Americans employed by them. Ruling in favor of Moore would create irreparable harm to the small business economy by creating unnecessary confusion in the tax code, enabling massive tax giveaways for corporations, and going against the wishes of the American people. Through this case, the Supreme Court has an opportunity to protect the tax code which ensures that small businesses have a fighting chance to equally compete in today’s economy,” said Chanda Causer, Main Street Alliance Executive Director. 

“The ability of our government to serve people and communities across the country is at stake in Moore v. United States. A ruling in their favor would be dangerous for the economy—upending our tax code, creating chaos, and disrupting small business,” said President & CEO Skye Perryman. “Small businesses in particular will bear the brunt of the burden if this extreme attack on our tax system, pedaled by the anti-democratic, far-right legal movement, succeeds. The Supreme Court should reject radical arguments made by plaintiffs in Moore, protect our tax code, and protect small businesses’ ability to compete in the economy.”